Tax burden has reached a record high, says Hague

Tony Blair and William Hague clashed over tax yesterday when the Conservative leader claimed that the tax burden on families and business had risen to a record high under Labour.

Tony Blair and William Hague clashed over tax yesterday when the Conservative leader claimed that the tax burden on families and business had risen to a record high under Labour.

Mr Hague said during Prime Minister's Question Time that new figures compiled by the House of Commons library revealed that the share of national income taken in tax had risen from 35 per cent when Labour took office to 37 per cent today, the equivalent of £670 a year in extra tax for every family.

The leader of the Opposition told Mr Blair: "Is it not now clear that you have given us the fastest rise in petrol prices, the biggest tax rise for the least well off, the highest tax burden in the history of the country?

"You are the Prime Minister of the heaviest taxes, the largest increases, the deepest distortions and the shallowest answers ever in the history of Britain. If you don't know that they are now the highest in history, you are in for a shock, because that is what the figures published today from the House of Commons library are clearly going to demonstrate."

Mr Hague claimed: "The people hit hardest by your stealth taxes are the poorest people in the country." He cited figures from the Office for National Statistics showing that in 1997 the poorest fifth of households paid 37p out of every £1 of income in tax and now they paid 40p. "These people thought the Government would help them and they have been utterly betrayed," he said.

But the Prime Minister dismissed Mr Hague's claims, saying that the library admitted its figures did not relate to typical families and that they assumed every family smoked between 20 and 30 cigarettesa day.

Mr Blair stressed that interest rates averaged 10 per cent under the last Conservative administration, while they averaged 6 per cent under Labour. "That is a saving of £1,000 a year for the average family," he said.

He told Mr Hague: "We are the party standing up for hardworking families, you are the leader that would return them to boom and bust."

Later the two parties were embroiled in a dispute over the figures after Mr Hague and the shadow Chancellor, Michael Portillo, stepped up their attack on tax and again cited the library's figures.

However, Tory officials admitted subsequently that the statistics were not new and that the party had reissued statistics compiled previously by the Commons library.

Labour accused the Tories of "recycling" old figures. A Labour source said: "Mr Hague and Mr Portillo have been caught red-handed recycling dodgy, partial, out-of-date figures. It is further proof that you cannot believe a word they say on tax or spending."

Andrew Smith, the Chief Secretary to the Treasury, said the "fiddled figures" did not take account of this year's 1p cut in income tax, the 10p starting rate of tax or the working families tax credit.

He insisted that the average family was £460 a year better off under Labour's tax and benefit changes and that families with children were £850 a year better off. "The tax burden on the typical family will be at its lowest level since 1972," he said.